Submitted by SD Contributor SRSrocco
U.S Silver Corp just had their Q2 conference call and pre-released their results. We now know what the break-even cost for U.S. Silver Corp is… it is more than $29.41 oz (the average price per kitco for Apr-Jun 2012).
Here is the their results for Q2 2011:
Here we can see that U.S. Silver had $6.5 million in net income for the second quarter of 2011. They did produce more silver this quarter compared to the Q2 2012, but we can see that their cost of sales were $18.5 million.
Now, if we look at their preliminary results below, we can see the stark difference a year can make:
Now… I am not going to compare U.S. Silver’s Q2 2012 to Q2 2011, because they produced 100,000 more ounces the previous year and the average price of silver was much higher. But, if I show what took place in Q1 2012, we can see how things have changed in just 3 months:
U.S. SILVER Q1 2012 RESULTS
TOTAL REVENUES = $23 million
COST OF SALES = $16.4 million
NET INCOME = $2.83 million
U.S Silver also produced 24,000 oz less silver in Q2 compared to Q1, but the cost of sales were also lower by $3 million. This is how the Executive Chairman of U.S. Silver sugar-coated the losses in the quarter:
said U.S. Silver’s Executive Chairman Gordon Pridham. “We are pleased to report the reduction of cash costs with Q2-2012 being lower than the previous two quarters as efforts remain focused on cost reduction.
Yes, it is true they lowered cash costs down from $21.06 Q1 to $19.31 Q2, but the lower price of silver is what really hurt their balance sheet. I would imagine that their break-even silver price would be more like $30-32… and not the fair price of $15 an ounce put forth by nitwits like Ned Schmidt.
Again… I bring this up to show how the lower price of silver is killing the silver miners. Those with the highest costs and lowest production figures get hit first.